set up life insurance or will first?
For those who have small kids, what would be wise move ?
Setting up a life insurance or a will first?
Curious what type of life insurance did you have?
May 2nd, 2017 2:24 pm
May 2nd, 2017 2:38 pm
May 2nd, 2017 2:46 pm
May 2nd, 2017 3:05 pm
May 3rd, 2017 7:42 am
May 3rd, 2017 2:51 pm
May 3rd, 2017 3:04 pm
May 3rd, 2017 4:10 pm
May 3rd, 2017 4:46 pm
Do they have kids? Can either spouse comfortably survive financially if one of them was out of the picture? If either spouse would have to downsize or take in boarders or something to make ends meet, then they should have insurance.
May 3rd, 2017 8:01 pm
May 3rd, 2017 10:37 pm
Completely agree with this if you have complex assets, own your own business, multiple properties, previous marriages, adult children, etc. I was thinking unrelated if all you own is your house and are married only once and have 2 little kids (mine are both under 5 lol).
May 18th, 2017 2:54 pm
I would, just to have enough to cover final expenses and not struggle financially when you already lost your love one (unexpected)
May 18th, 2017 5:39 pm
Other than current mortgage and debt, there are at least 3 factors you can consider:
May 19th, 2017 10:54 am
I looked at both critical illness insurance and whole life insurance and felt that the expense on those in my situation would not be money well spent. Whole life in general just seemed like a bad idea. Most people should stick with term life. Critical illness insurance didn't make a lot of sense to me either, given the number of exclusions they had and the overall cost. Critical illness insurance is way more expensive than life insurance, given the relatively small payouts. Collection of critical illness insurance payouts isn't always easy either. I know they address different issues, but in an environment where we have government subsidized healthcare and relatively generous TFSA contribution room, I'd rather put the money into a TFSA than critical illness insurance. You could also put money into both if you can afford it but even then I don't think it's necessarily a good idea.Sorkid49 wrote: ↑May 3rd, 2017 2:51 pmAgree with above, insurance and will has nothing to do with each other, therefore you can start both at the same time. If your situation is not overly complicated, you can start with a basic will, and make changes along the way (you can review it every few years or when there are changes to your situation e.g. 2nd child/3rd child...)
Here's what I have (and what i would recommend regardless of age):
You and Spouse -
Set up a budget and use it to buy a (permanent) whole life PLUS a term life that would cover your liabilities
For example, if your budget for yourself is $200, and your estimated liability is $800,000 (some mortgage and living expense for young kids).
Depending on your age, you can buy $80,000 whole life insurance for $100/mth, and 720,000 for $100/mth. Buy a whole life that is limited pay (i.e. you only need to pay for a pre-determined number of years). Same for your spouse.
For the kids - two products that I bought.
Whole life insurance - find the ones with better returns. Two reasons, insurance is cheap to get when they are young and healthy and they can potentially use the money when they are older (>30 nowadays).
Critical Illness - Three reasons
1) it's relatively cheap,
2) some insurance company provide a return of premium (75%) at age 25, so it's pretty much free.
3) knock on wood if (and unfortunately, nowadays this 'if' is getting more and more common) my children experience any critical illness, I don't have to worry about taking time from work to take care of them)
Keep is mind that everyone is different, talk to different ppl (not just Financial/insurance advisors) and get a sense of what you want and need.